The GBP/USD pair also tried to resume its upward movement on Monday. Recall that yesterday we formed a trend line, which is already overcome at the moment. Therefore, it is not for nothing that we called it "formal". Thus, the pound's growth has as many chances to continue as the euro's growth. Monday showed that the market is not particularly strongly inclined to buy these currencies, which means that the dollar can resume its victorious pace at any moment. Moreover, the Federal Reserve raised the rate last week by 0.75%, which is a record for the last 20 years. The pair also failed to overcome the level of 1.2260, which is also very important. Also there were no important macroeconomic or fundamental events on Monday. In general, a very dull day, when it was most inconvenient to trade. There is not much to say about the prospects of the British currency now. They still remain very vague and corrective at most.
On the 5-minute timeframe, you can clearly see that the movements during the day left much to be desired. In principle, the pair has formed several good trading signals, but if we consider them in a complex way, then everything is not so rosy. The first buy signal, when the price rebounded from the 1.2216 level, was not bad. After its formation, the price rose to the level of 1.2260, around which it has already formed a sell signal. Therefore, a long position should be closed and shorts opened. It was not possible to make money on a short position, since the pair could not go down even 20 points. Then the pair overcame the level of 1.2260, but this signal also turned out to be false and a small loss was also received on it, since very soon the quotes returned to the area below the level of 1.2260. The last sell signal should not have been worked out, since at that time there were already several false signals formed near the level of 1.2260. As a result, we have one profitable trade and two unprofitable ones.
How to trade on Tuesday:
We formally have an upward trend and a trend line on the 30-minute timeframe. But in fact, the trend line has already been overcome, the growth prospects for the pair are very vague, but a new fall has not yet begun. Thus, in general, a flat or "swing" may even begin now. You need to be ready for everything. Last week, the market traded under the influence of two meetings of central banks and the US inflation report. This week there will be only speeches by Fed Chairman Jerome Powell, who has already said everything that was expected of him, and a report on British inflation on Wednesday. On the 5-minute TF on Tuesday, it is recommended to trade at the levels 1.2106, 1.2164, 1.2216, 1.2260, 1.2329-1.2337, 1.2371. When the price passes after opening a deal in the right direction for 20 points, Stop Loss should be set to breakeven. No important events are planned for tomorrow in the UK and the US, so the market will again have nothing to react to. Volatility, although still quite high, has declined at the beginning of the new week.
